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Wednesday, May 01, 2002

With a headline that combined $25 million and technology that doesn’t work, I found myself drawn to an article from Darwin Online this week. The article was entitled, P.O.’d and it was sub-titled Mail Boxes Etc. spent $25 million to position itself as the real world's shipping partner to the virtual e-tail space. One problem: The technology doesn't work.

Written by Lauren Gibbons Paul, the article delves into the effort by Mail Boxes Etc. (MBE) to roll out a connectivity platform to link their brick and mortar presence to the Internet in a novel manner. The project found its seeds in the Internet-everywhere heyday of early 1999 and crashed into reality by year’s end. Today it continues to struggle along but seems destined for the trash heap in the very near future.

MBE (a San Diego based company) has 3,500 domestic franchises and they felt that they could turn this real world physical, real-estate asset into a cyber-play for themselves. They appear however to have fallen in love with what turned out to be a big problem spot; satellite technology. Using satellite technology to connect franchisees across the land probably seemed like a slam-dunk approach but I suspect that a narrow view of the opportunity drove this conclusion.

What MBE needed was to have their franchisees connected. How they connected doesn’t seem to be nearly as critical in hindsight and yet the fact that MBE forced connectivity over satellite pretty much guaranteed that the franchisees would be paying a premium cost for a service that could never be optimized to their need. Satellites work well for rural locations where the choices for connectivity are limited or in fixed and scheduled applications such as an upload of an inventory file nightly or mass distribution of data to all recipients at one time. They also work well for always on applications that can be set and forgotten. Using them for sporadic, as needed applications tends to be a bit tougher as MBE found out the hard way. (By the way, DirecTV is struggling with the same basic thing in trying to promote their satellite-based DSL type service.)

Perhaps one can forgive MBE a tiny bit for what today appears to be a true over-reach but in 1999 it probably was deemed a “sure thing.” However, a $25 million bet by a company with just $81 million in revenue and a perception that there would be “just one way” to connect to the Internet and that would be over a satellite sky-way, in retrospect combined to doom the project before it even got off the ground.

Perhaps the really creative thought would have recognized that merely getting the franchisees connected in any manner they could would have been the winning point to start from.

Saturday, April 27, 2002

I regularly check in on the Japan Today web site (at www.japantoday.com).My Japanese friends tell me it is similar to the USA Today in its “McNugget” approach to the news of Japan though I find it interesting nonetheless.

In checking the site earlier this week, an article entitled “Koizumi tries to calm Asia down over Yasukuni Shrine visit” caught my eye.In part because I remembered reading a similarly titled article last year and in part because I wondered if this social/cultural event would impact future business issues given the discussion of last week regarding Japan’s electronics companies “rushing” to invest in Chinese engineering and design facilities as a competitive move in spite of some fears of Japan being overshadowed by China economically within a decade or two.

To that end, I quickly found a string of articles beyond Japan Today covering the visit all of which point to the visit further straining Japan’s slowly evolving relationships with China and South Korea.While I’ve concluded that this incident doesn’t seem to be an immediate business concern, it appears to be a potential lightning rod and therefore should be eyed warily from a business perspective.

The Yasukuni Shrine is “by far Japan’s most controversial religious site because of its dedication to the 2.5 million soldiers killed in wars since the mid-1800s.”The visit by Japan’s Prime Minister Junichiro Koizumi was “intended as a prayer for peace, but it elicited swift and harsh criticism from both Beijing and Seoul” instead.Koizumi “may have hoped to avoid inflaming China and Korea, while at the same time solacing conservative groups within Japan.”

However, “China resolutely opposes visits by Japanese leaders, in whatever form and at whatever time to the Yasukuni Shrine, which honors Class A war criminals” stated Beijing’s Foreign Ministry in one of “several condemnations.”And in South Korea, in a “rare joint action, the country’s governing and opposition parties condemned the visit.”

In Japan, the Prime Minister’s decision to visit the shrine on August 15 (the anniversary of Japan’s WWII surrender) is often seen as “something of a nationalist litmus test” and most Japanese right-wing politicians have used such a visit as a “symbolic gesture to express denial of wrongdoing during the war.”And while the visit’s “ritual is silent, its sinister implication is sufficiently loud to cause indignation among the millions of Chinese and Koreans who have had fathers and sons killed and mothers and daughters raped and killed by Japanese soldiers during the war.”

Koizumi, whose popularity amongst the Japanese has fallen from 90% to about 40% may have thought that by visiting this year in mid-April instead of August he could appease the local population and avoid an uproar ala last years’ similar situation with China and South Korea.However, what he found was that a political solution actually did little to appease any of the parties involved.

Again, while the tensions attributed to this visit are not immediately likely to result in any business ramifications, if nothing else, the visit goes to show just how fragile the relationships are between these neighbors who fought for so many years and thus should be carefully monitored beyond the headlines.